Obama signs STOCK Act to ban "congressional insider trading"

President Obama on Wednesday signed the STOCK Act into law, a bipartisan bill designed to stop so-called "congressional insider trading."

The measure, which passed in Congress last month, prohibits members of Congress from financial market trading based on nonpublic information they have obtained in the course of their congressional work.

The president hailed the law as a "good and necessary" step in the fight against corruption and the influence of money in politics. Still, the president encouraged Congress to enact more reforms, while some public advocates lamented the fact that the bill was watered down.

In spite of its shortcomings, Mr. Obama said the law's bipartisan support "shows when an idea is right we can still accomplish something on behalf of the American people to make our government and our country stronger."

"The powerful shouldn't get to create one set of rules for themselves and another set of rules to everybody else," Mr. Obama said. That rule, he said, "certainly should apply to our elected officials, especially at a time when there's a deficit of trust" in Washington.

Lawmakers are already subject to insider trading laws, but some argue that current insider trading laws have, up to this point, not applied to nonpublic information about current or upcoming congressional activity, since members of Congress aren't technically obligated to keep that information confidential. The issue of "insider trading" in Congress came to the fore after a piece on CBS News' "60 Minutes" shed new light on the matter last year. Hotsheet also spotlighted the issue in its "United States of Influence" series, which examined the influence of money in Washington.

60 Minutes report: Congress trading stock on inside information?
Why is Congress a millionaires club?
Congress passes scaled back STOCK Act

The president was joined at the bill signing by its Republican and Democratic backers, as well as public advocates who have pressed for reform on the issue for years.

Craig Holman, a government affairs lobbyist for the consumer advocacy organization Public Citizen, joined Mr. Obama today and said in a statement that the new law represents "the most significant ethics achievement of the 112th Congress."

Still, he said, "It could and should be stronger, and legislation is pending to strengthen it. Wall Street didn't want this, and Congress passed it only because they were shamed into it."

In addition to barring "insider trading," the STOCK Act requires that members of Congress and government employees report certain investment transactions within 45 days after a trade. There are a handful of other disclosure and ethics requirements in the bill; For instance, congressmen and certain government employees will have to disclose the terms of their personal mortgages. Congressmen are also barred from getting special access to initial public offerings (IPOs).

Will "political intelligence" stay in the dark?
Senators: We shouldn't buy and sell stocks

But in order to pass both Houses of Congress, the legislation was pared back from its original form. The final bill dropped a provision passed in the Senate that would have given prosecutors new tools to investigate and prosecute criminal conduct by public officials. The final version also left out a provision that would have required those employed in the burgeoning "political intelligence" industry to register with Congress in the same way that lobbyists do. In the political intelligence industry, people with access to insider information sell their knowledge of political developments to Wall Street investors, who then use it to make investment decisions.

The political intelligence provision was stripped in the House after House Majority Leader Eric Cantor said there should be more study of the issues involved. He also said the issue was outside the scope of the bill and wondered if the amendment could have negative consequences.

Mr. Obama today advocated for more reforms, such as barring congressmen from trading in any stocks in a sector they may influence -- an idea promoted by some lawmakers like Democratic Sens. Sherrod Brown of Ohio and Jeff Merkley of Oregon.

[slatep]

At least he finally got something almost right.

Now he needs to sign a bill on Congressional reform to prove he and Congress really believe "all men are created equal.!!

[nearl451]

I know....it's a watered down bill and not the greatest, but what else can you pass in this quasi 50/50 all partisan all the time environment.

Best one can say is: It's a step in the right direction.

[antoniof123]

Big deal Cantor gutted it so no bite as alwasys.

Business as usual fact is congress and big business hate America.

[TimeToEvolve]

We have a radically corrupt country that has been severely damaged by the big corporate takeover of almost everything to benefit the Top 1%. It's almost easy to forget we are supposed to have a government of, by and for the people. It's almost hard to remember when this was a decent country with bright futures for our kids. 33 years of failed Reaganomics has certainly taken its toll.

[nearl451]

Unfortunately, not everyone sees it that way and when it comes to economics, the camps seem to play more exclusionary politics than to examine data detatched from rooting for solutions (cheering one camp or the other).

Not everything Reaganomics was bad, especially in the short term. It's just that the supply side stimulus, just like Keynesian demand side stimulus, is only good if applied temporarily...returning to fiscally sound policy at some point. Certainly the UK and Australia learned much earlier than we do about what worked and what didn't about Thatcherism (supply siding, abject deregulation, privatization, etc.).

I personally find most interesting, the thinking of those economic advisors who have had to adjust their thinking over time of what works and what does not (versus what just works short term). The epitome of this is David Stockman (whom I don't agree with entirely).

[dukefawcett]

Too little too late from this loser.

[TimeToEvolve]

Yet another legislative victory for Obama before he crushes Robmee later this year. You must miss the Republicon criminals of the Bush Crime Family. They did so much good for America.

[nearl451]

Did you not know that this is a Congressional Bill that Obama is just signing?

He didn't create the legislation...justsupports the direction.

So why even bother to post what you did.

[WHAT-IS-HE-SMOKING]

But in order to pass both Houses of Congress, the legislation was pared back from its original form. The final bill dropped a provision passed in the Senate that would have given prosecutors new tools to investigate and prosecute criminal conduct by public officials. The final version also left out a provision that would have required those employed in the burgeoning "political intelligence" industry to register with Congress in the same way that lobbyists do. In the political intelligence industry, people with access to insider information sell their knowledge of political developments to Wall Street investors, who then use it to make investment decisions."
Let me see, it passed the Senate (democratic controlled) but could not pass the house unless some of the teeth was taken out of the bill. And who controls the House?

"The political intelligence provision was stripped in the House after House Majority Leader Eric Cantor said there should be more study of the issues involved. He also said the issue was outside the scope of the bill and wondered if the amendment could have negative consequences."
Yeah, I am surprised! NOT!!!

[TJphoto]

The Government sent Martha Stewart to prison for the same offenses that Congress has been committing for years. So Congress comes up with a reform bill that is watered down by Eric Cantor. THROW THEM ALL OUT regardless of party.

[curtlarson1]

OMG yes we are way over due for a con-con shut 'em down now.

[Overturn_legallized_theft]

Trampled by their greed
for trade they illegally traduce,
how can they possibly need
laws, so only we can reduce.

[RangerDan107]

It's time to make income a criteria for congress and the senate. Income is a greater hot spot today than location. If the rich make up 10% of the populace then no more than 10% of congress and the senate can be rich. And the same for other income levels. Both houses are no longer representative of their constituents. They are out of touch with middle class America.

[STOCKAct]

ProCon.org has been following the issue of insider trading and Congress for years. Check out a summary of the STOCK Act and its history here: http://insidertrading.procon.org/view.resource.php?resourceID=004520